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Life
has changed for California workers. They work longer hours
for less money and are faced with whopping increases in their
housing budgets. Disposable income has diminished. Commute
time and transportation expenses have markedly increased.
Medical coverage is out of reach for many. Medical professionals
and college professor look elsewhere to a softer housing market.
Teachers are already laid off in the big State government
employment sector and hiring freezes.
According
to the State Housing Task Force, high housing costs impact
low-income groups drastically. Food, clothing, medical, recreation
are sacrificed for shelter costs. And, the stress on the low
and moderate family is only increasing. The
length of time needed to achieve home ownership is longer
and out of reach until families have moved into the above
medium income. To buy a medium income home today one needs
$100,000.00 of family income to qualify for a loan plus the
down payment. As interest rates rise these opportunities will
diminish.
Water
and wastewater infrastructure, environmental expenses, and
increasing land costs make affordable housing more difficult
to build at market rate. So this market has been left to nonprofit
developers who cannot keep up with the demand.
With
rents so high, however, one wonders why the for profit developer
is still on the sidelines and why the big financial institutions,
pension funds, mortgage banks, syndicates, and housing funds
have not gotten into the futures market in low income housing
starts.
The
Federal Home Loan Bank underwrote $1.1 trillion in home loans
last year, the bright spot in a dull economy that has laid
off millions of workers while leaving last year's unemployed
off the dole rolls. More states are cutting social programs
to avoid deficits. Housing Tax credits for writing down project
costs are becoming less available while housing growth mandated
by the state is increasing.
CLIH
hopes the community will partner to offset some of these effects.
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